April 8, 2015

Wondering, on Wednesday (v27)

I had a few interesting conversations with friends this week below are recaps of a couple of them.

One friend's husband has his own business and has a few employees. We got talking about her heading off to meet with their accountant to get their taxes done.  And of course that got us on the whole file-early-or-wait- until-the-last-minute decision, and how we all feel we pay too much. She mentioned that, to solve that last problem, one of her husband's employees mentioned that he and his wife are going to have another child, so they get the benefit of another deduction.  That would be their seventh child.

I'm wondering, this Wednesday, how many times I've heard or seen someone mention all those welfare people popping out kids to get benefits? A hundred? Five hundred? A thousand?  I can't begin to count them all -- but I do think this is one of only a handful of times I've heard anyone talk about non-welfare people doing exactly the same thing for exactly the same reason.

I've talked about it before, such as in this post from last January, written in response to Rand Paul's thoughts on capping benefits for folks on welfare and not increasing them if another child arrives. I asked then, and I ask now (as my friend did the other day) why we reward anyone who does this?  And I'm also wondering, if Senator Paul would be willing to address both the working extra-baby-makers and the welfare extra-baby-makers at the same time?  I doubt it.

I had a conversation with another friend who's getting ready to send her first-born to college. As is the case with many parents, she's feeling mixed emotions, and not just about her baby leaving the nest. She and her husband both are long-time employees at their respective companies, have worked hard to save money for college (and for a rainy day), and are trying to navigate their way through the mess that is the financial nightmare of higher education.

She ran a scenario by me that I had never really thought of before, one I had not heard mentioned before:
Why is it that we are bombarded with ads offering multi-year loans for tens of thousands of dollars for a car, with zero percent interest, and yet we expect parents to pay somewhere north of seven percent for a college loan?  Aren't we encouraging exactly the wrong behavior here?
Well, yes, it seems, yes we are.

And think about college endowments. Here's a snapshot of schools with the largest endowment per student, as well as those with the largest endowments total.   Harvard has the largest endowment, over $35B in 2014, up $10B compared to 2005.  Princeton takes the cake in the per-student endowment, at $1.857M each, for their 7567 students.

Even the most die-hard alum must be wondering what their alma mater could possibly do with all of that money, when folks like my friend struggle to figure out the best way to pay for college, save for a rainy day, and plan to still have a life when she and her husband are empty-nesters in a few years, or hoping to retire a few years after that.

I'm wondering how anyone can look at this and not wish there was an equitable way to get kids the education that everyone says they need to be successful in life.

Maybe Rand Paul and Ted Cruz can work on this as they work on winning the White House.